"Virtual businessmen" help Trinh Van Quyet contribute thousands of billions of dong in fake capital

On the afternoon of July 22, after the representative of the Hanoi People's Procuracy announced the 107-page indictment, the Trial Council isolated defendant Trinh Van Quyet, his sister Trinh Thi Minh Hue, and defendant Le Van Tuan (auditor of Hanoi CPA Auditing and Accounting Company Limited) to take independent statements from the remaining 47 people.

The first person to answer the interrogation, defendant Trinh Van Dai (former Deputy General Director of FLC Faros Construction Joint Stock Company) stated that he was Mr. Quyet's cousin, worked at FLC for many years, and held many positions.

Not a shareholder, not contributing capital to Faros Company, Mr. Dai is the one who signs the capital increase decisions, payment authorizations, money transfer papers (to contribute capital to Faros), signs investment trust contracts between Faros and companies in the "ecosystem" to legalize the cash flow after capital misappropriation.

"Why did you sign without contributing money?", the judge asked. Mr. Dai replied that his cousin, defendant Trinh Thi Minh Hue, asked him to sign, thinking that it was a task to "serve the company's business". He stated that he did not know that Quyet and Hue would use his signature to list the company and sell shares on the stock exchange to commit fraud.

In addition, Mr. Dai also lent Hue his ID card to open 3 companies and did not remember how many securities accounts he had Hue open. Mr. Dai said he did not use all of these accounts to manage but gave them to Hue, "without knowing how to use them for anything". Besides his salary at the company, Mr. Quyet's brothers did not give him any other benefits.

In the case, Mr. Dai was part of a group of 8 people prosecuted for both stock market manipulation and fraud.,jointly responsible for the loss of 4,300 billion VND. He was assessed by the prosecution agency as "actively participating" and assisting Mr. Quyet's brothers in the act of capital misappropriation and market manipulation.

Like Mr. Dai, defendant Trinh Tuan, former Director of FLC Land Company (Mr. Quyet's nephew) and Nguyen Van Manh, employee of FLC Land Company (Mr. Quyet's brother-in-law, defendant Trinh Thuy Nga's husband) both stated that they were asked by defendant Hue to "sign whatever they were asked to" but could not remember clearly what the document was or what purpose it served.

They perceived these signatures to be for general "business purposes," although it was unclear what the company was manufacturing or trading.

Defendant Nguyen Thi Hong Dung, according to the contract signed with Faros, was an individual who received 360 billion VND in investment trust to "do the project", but in reality, according to her testimony in court, she was a 52-year-old tailor, "in-law of" Chairman Quyet. She stated that she did not cooperate, borrowed 360 billion VND from Faros, and was only asked by Hue to sign the documents without knowing why.

According to the prosecution's accusation, Faros was inflated 5 times by Mr. Quyet and Ms. Hue, increasing its charter capital 2,866 times from 1.5 to 4,300 billion VND. In the first time, increasing from 1.5 billion to 225 billion VND, Ms. Dung was one of 3 people Hue asked to act as "businesswomen", signing contracts worth hundreds of billions of VND to disburse the inflated amount of 225 billion VND.

Ms. Dung then lent Hue her ID card. Later, when working with the investigation agency, she learned that her ID card was used by Hue to open companies and securities accounts, as he did with the above defendants.

Chief Accountant Faros: "I think Mr. Quyet has real money"

According to the indictment, after successfully inflating capital 5 times, the next intention of Mr. Quyet and his brothers was to list Faros on the stock exchange. The first thing to do was to submit the financial reports of the last 3 years of Faros to an independent auditing company, CPA, so that CPA could evaluate the purity and transparency of these financial reports.

Faros started out as a company with a charter capital of 1.5 billion VND, which was purchased by Mr. Quyet with the instruction of Mr. Doan Van Phuong, then General Director of FLC Group, to be the general contractor for FLC projects as the investor. However, according to the accusation, Faros had no capital or collateral.

Faros's chief accountant at that time, defendant Dam Mai Huong, was accused of signing Faros' financial report for the first 6 months of 2016, along with the balance sheet and cash flow statement... to determine that Faros had 4,300 billion VND in equity, although in reality more than 3,600 billion VND of this was fake.

Ms. Huong was forced to "assist" Ms. Hue in inflating capital, thereby being prosecuted for fraud and appropriation of property.

At the trial on the afternoon of July 22, Ms. Huong asked to "reconsider" the accusation on the grounds that she had only been working as chief accountant for 6 days and did not know who Mr. Quyet or Ms. Hue were, so she could not be considered to have "assisted" them in the fraud.

"The defendant has only been working for 6 days, and does not have the professional capacity to know how the previous stages of capital increase were. Previously, the defendant did not participate so he did not know. Based on his perception, he found it consistent with the report documents, thinking it was correct, trusting the examination of the competent authorities, the auditing agency also agreed so he signed periodically," defendant Huong stated.

Objecting to this statement, defendant Nguyen Thien Phu, Huong's predecessor, said that saying she had only been chief accountant for 6 days was not accurate, because before that she had a 2-month probationary period in this role.

According to the indictment, Mr. Phu was accused of directly working with two defendants from CPA to "launder" financial reports, identifying Faros as having 4,300 billion VND; signing 466 payment orders to transfer more than 12,000 billion VND in fictitious capital contributions...

Regarding the Faros capital of 4,300 billion VND, the defendant admitted that "from a professional perspective, these reports were not qualified". Being prosecuted for fraud and appropriation of property, Mr. Phu said "he did not think he would appropriate property but only worked as an accountant".

This former chief accountant said that when he signed the fake share transfer papers and money payment papers, he only thought "signing for Mr. Quyet" and did not know whose money it was.

"The defendant thought Mr. Quyet had real capital to sign on his behalf," said Mr. Phu.

The Supreme People's Procuracy accused FLC Group, founded and run by Mr. Quyet since 2009, of having 82 companies and 5 listed stocks on the stock exchange.

In 2014, Mr. Quyet directed his sister Trinh Thi Minh Hue and former General Director of FLC Group Doan Van Phuong (who is currently on the run in the UK) to increase the capital contribution of Faros Company (stock code ROS) from 1.5 billion VND to 4,300 billion VND, listed on the stock exchange.

The defendants’ prolonged violations in 2014-2016 caused stock investors to mistakenly believe that ROS shares had real value. Mr. Quyet sold 391 million ROS shares to more than 30,400 investors, appropriating VND3,620 billion. This behavior led to Mr. Quyet being prosecuted for fraud and appropriation of assets.

For stock market manipulation (2017-2022), the Supreme People's Procuracy accused Mr. Quyet of directing his sister Hue to ask 45 people to stand in the names of 20 enterprises and open 500 securities accounts to manipulate the stock market with 5 FLC stock codes including AMD, HAI, GAB, FLC, ART.

These 5 stocks were continuously bought and sold by Mr. Quyet's group in large volumes, dominating the market at the opening and closing of trading sessions. The group placed buy and sell orders and then canceled them to create fake supply and demand, thereby earning a profit of 684 billion VND.

In both violations, Mr. Quyet was identified as the mastermind, deciding and directing all actions of his accomplices.